Oil prices continue to decline in light of renewed fears of global oversupply

oil prices

Oil prices continued to decline during trading today, Wednesday, in the European session, recording the second daily loss in a row, and Brent crude fell to its lowest level in three weeks. It recorded its highest level in two years, despite the recent efforts and efforts of OPEC and independent producers and their agreement to extend the reduction of production levels for an additional nine months. The American Petroleum Institute is expected to issue its report on US stocks later in the day.

At exactly 12:15 GMT, US crude oil prices fell, to reach the price of a barrel at 48.60 dollars, from the opening price of the trading session at 49.56, and the highest price per barrel was recorded at 49.69 dollars, while the lowest price was recorded at 48.29 dollars, and Brent crude declined to trade the barrel at the price of 50.50 dollars from the opening price at 51.80 dollars, and the highest price per barrel was recorded at 51.91 dollars, while the lowest price was recorded at 50.14 dollars, the lowest in three weeks.

Yesterday, US oil prices incurred a loss of about 0.8% for the first day after gains that lasted three consecutive days, and Brent contracts for “July delivery” lost about 0.7%.

Throughout last week’s trading, oil prices lost about 2%, this comes despite the approval of OPEC and independent producers to extend the agreement to reduce production levels for an additional nine months to end in March 2018, but the markets were expecting that OPEC would agree to increase the quantities of cuts.

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The Libyan National Company stated yesterday that Libya raised its daily production during this week to reach the level of 800,000 barrels, while the volume of Libyan production in April reached 700,000 barrels per day, the highest since the end of 2014.

It is likely that US shale oil production will continue to rise for the second week in a row, especially after the announcement of the increase in the number of US drilling rigs for the 19th consecutive week, and US oil production is currently 9.32 million barrels per day, the highest since August 2015.

The pressures on oil prices continue, especially after the rise in Libyan production and the rise in US shale oil production, in reference to the continuation of the global oversupply.

Goldman Sachs Group announced this week that it reduced its forecast for global oil prices during this year, as it lowered the price of a barrel of US crude oil to reach $52.92 from $54.80, and lowered the price of a barrel of Brent crude to $55.39 from $56.76.

It is expected that the American Petroleum Institute will announce today its unofficial report on US stocks, and tomorrow the official data on stocks will be released through the US Energy Information Administration, amid expectations that inventories will decline by 3.0 million barrels, recording the eighth consecutive weekly decline.

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Mohamed Abdel Khaleq
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